Nintendo is hoping flagship games like Mario and Zelda will help keep players interested in its aging Switch console series.
Charlie Tribleau | AFP | Getty Images
nintendo reported a decline in profit and revenue in its fiscal year, driven by a decline in sales of its flagship Switch console.
For its full fiscal year, which runs from April 2022 and ends March 31 this year, Nintendo reported revenue of 1.6 trillion yen, meeting its own forecast. This was a decline of 5.5% year-on-year.
Nintendo reported 432.7 billion yen in net profit for the fiscal year, down more than 9% year-over-year. However, it was better than the company’s own forecast of 370 billion yen.
The Japanese gaming giant sold 17.97 million units of its flagship Nintendo Switch console series, in line with its forecast of 18 million units for the fiscal year. This is a 22% drop compared to the over 23 million Switch units sold in the fiscal year ending March 2022.
Nintendo stated that “shortages of semiconductors and other components affected production until the end of the summer” and that the company “did not experience the sales growth primarily during the holiday season” that it had seen in the previous year.
For the fiscal year ending March 2024, Nintendo projects sales of 15 million units of the Switch.
Nintendo is competing with the Switch, an aging console that has been on the market for six years, with investors fearing that its sales may have peaked. The company was forced twice Lower your forecast for Switch sales in the last fiscal year after a disappointing holiday season.
Over the course of the Switch’s life, Nintendo has attempted to refresh the console with a handheld version and an improved screen. This has helped in the short term but has done little to arrest the overall trend of falling sales.
opposite opponent Sony Reported highest ever profit for the year ended 31st March. The company a Record 19.1 million PlayStation 5 consoles in the financial year. Sony’s PlayStation 5 has been on sale for just over two years, so it’s still in its infancy.
Nintendo shares are up 3.6% this year while Sony’s is up 25%.
Switch ‘Bone past its peak’
“The Nintendo Switch had a great run, but it definitely hit its peak,” Serkan Toto, CEO of Tokyo-based game consultancy Kantan Games, told CNBC.
“Based on the forecast for the new fiscal year(s), I would expect no miracles, but rather the company running on auto-pilot and fulfilling my duty to existing Switch users. Every console cycle ends eventually. Turns out, and Nintendo, too, now needs a new piece of hardware to revive its sales.”
The key for Nintendo now is how it continues to grow revenue from its 114 million annual paying users. The gaming giant has a strong array of games and recognizable characters, from Pokémon to Mario.
However, Nintendo said that software sales for the year ended March 31 totaled 213.96 million units, down 9% year-on-year.
Nintendo is set to release The Legend of Zelda: Tears of the Kingdom, one of its most popular franchises, on Friday.
The company estimates software sales of 180 million units in the current fiscal, which is expected to decline further.
Nintendo said net profit is expected to drop 21.4% to 340 billion yen in the year ending March 2024.
